Graduates to drive return of first-time buyers

The first-time buyer share of the housing market could increase over the next year, driven by a wave of university graduates trying to get on the property ladder with their parents' help, a study has suggested.

Seven in 10 potential first-time buyers said they had been university educatedPhoto: Alamy

Around 27pc of those planning to buy a home in the next 12 months will be doing so for the first time, an increase on 23pc a year ago, property search website Rightmove found, although this still remains "painfully shy" of the 40pc level typically seen before the credit crunch.

Seven in 10 potential first-time buyers (69pc) said they had been university educated, and the graduates surveyed also tended to be slightly younger and have £10,000 more to spend on a deposit than non-graduate first-time buyers, the study found.

The average age of a graduate prospective first-time buyer is 30, compared with a slightly older average age of 32 for a school-leaver. The typical age for a postgraduate intending to buy for the first time is 33, the study said.

Graduates also said they had built up a first-time buyer deposit of around £35,000, compared with £25,000 for people without a university degree.

Would-be first time buyers are facing a huge struggle to buy their first home, thanks to the shrinking availability of low-deposit mortgages and lenders' tightened borrowing criteria, with many demanding 20pc deposits rather than the 10pc typically needed five years ago.

Miles Shipside, director of Rightmove, said: "Joining the world of work straight from school may start your earning career a few years earlier, but in the current housing market it seems the downside is that it may delay being able to satisfy your home-ownership aspirations."

Researchers found that graduates trying to get on the property ladder were also more likely to still be living in the family home, suggesting that they had been able to build up a deposit by living with their parents rather than moving into the rental sector, which has seen rents soar owing to high demand.

Nearly a third of university-educated potential first-time buyers said they expected to have some financial family help in buying a home, compared with a quarter of non-graduates.

Mr Shipside said: "It seems some return to the family home for cheaper accommodation, and then some are helped by a withdrawal from the family coffers to assist their final exit.

"Whether it's a parting gift or a parting shot to get them to finally leave the family nest, it helps them both raise a higher deposit and means graduates buy their first home younger than 'non-grads'."

More than 18,000 potential buyers took part in the nationwide survey last month.